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Frequently Asked Questions concerning Labour Force Survey
The main objective of the Labour Force Survey is to obtain basic material based upon which various kinds of administrative policies, such as hiring policies, are executed by revealing the employment and unemployment status in Japan. The Labour Force Survey has been undertaken on a nation-wide scale since July 1947 following a trial period of about a year that began in September 1946.
At present, the targets of the survey are the members aged 15 years old and over of about 40,000 households selected at random from the whole country. These household members are approximately 100,000 in number. The Labour Force Survey asks them about their employment and unemployment status.
Survey staff in every part of Japan distribute questionnaires to randomly designated households and collect them after they have been completed. The number of the employed and unemployed, the unemployment rate, and other information derived from this survey provides a significant indicator of the employment trend in Japan.
The definitions of employed and unemployed are shown below. Like other major advanced countries, they conform to the international standards stipulated by the International Labour Organization (ILO) to grasp the employment and unemployment status objectively.
There are two methods of determining the employment status: the "Usual" method in which the employment status is determined based on the usual status, and the "Current(actual)" method in which it is determined based on the existence of activities during a certain period of time.
The "Usual" method has an advantage of being less affected by the reference period or a temporary situation during that period, while it has a disadvantage that the survey results heavily depend on respondents' interpretation of their usual situation due to ambiguity of the definition "Usual".
On the other hand, the "Current" method has a disadvantage of being more affected by the reference period or a temporary situation during that period, while it has an advantage of clear definition.
The ILO adopted the "Current" method, which is more suitable for grasping the employment and unemployment status because of its clear definition, and is further narrowing the definition.
The unemployment rate, defined as the percentage of the unemployed to the total labour force (sum of the employed and unemployed), is calculated as follows:
Unemployment rate (%) = (Unemployed / Labour force) x 100
Concerning the Employed
Like other major advanced countries, the definition of the "employed" used for Japan's Labour Force Survey conforms to the international standard stipulated by the ILO to grasp the employment and unemployment status objectively.
The ILO defines the employed as follows:
The "employed" comprise all persons above a specific age who during a specified brief period, either one week or one day, were
(1) "paid employment", i.e. persons who during the reference period performed some work for wage or salary, in cash or in kind (include persons with a job but not at work), or
(2) "self-employment", i.e. persons who during the reference period performed some work for profit or family gain, in cash or in kind (include persons with an enterprise but not at work).
the Labour Force Survey also asks the employed about their working hours. According to the Labour Force Survey (2017 Yearly Average), persons who worked for an hour or more during the last week of a month are 63.79 million, of which, 570,000 worked for one to four hours.
Like other major advanced countries, the definition of "family workers" used for Japan's Labour Force Survey conforms to the international standard stipulated by the ILO.
The ILO defines family workers as follows:
Unpaid family workers at work should be considered as in self-employment irrespective of the number of hours worked during the reference period.
Those called "freeters" are classified as either employed, unemployed or not in the labour force, depending on their employment status during the reference period. In other words, those who during the reference period performed some work are regarded as employed. On the other hand, those who during the reference period did not work at all, sought work, or waited for the results of job-seeking activities, and were available for work are regarded as unemployed. Those other than the above are regarded as not in the labour force.
The White Paper on the Labour Economy 2007 by the Ministry of Health, Labour and Welfare defines "freeters" as those aged between 15 and 34, graduate in the case of male, graduate and single in the case of female and, (1) for those currently employed, who are treated as part-time or arbeit workers by their employers, (2) for those currently unemployed, who seek the part-time or arbeit jobs and (3) for those not currently employed, who are neither engaged in household duties, attending educational institutions nor waiting to start a new job, and wish to find part-time or arbeit jobs.
8. Which industry are dispatched workers classified into, "the dispatching" industry or "dispatched" industry?
From January 2013, dispatched workers in each industry are requested to provide information on the establishments which they are "dispatched" to for grasping labour input clearly. However, until December 2012, they reported the "dispatching" industry, which was classified into "Services, N.E.C.".
Concerning the Unemployed
9. The actual unemployment rate is said to be higher than the value of a government official announcement. Is it true?
The unemployment rate is calculated using the number of the unemployed and the total labour force. Like other major advanced countries, the definitions of these terms used for Japan's Labour Force Survey conform to the international standards stipulated by the ILO to grasp the employment and unemployment status objectively. Therefore, like other nations that create statistics in accordance with ILO international standards, those who gave up job-seeking activities because of their severe economic situation or other reasons, that is, who lost a will to find a job, are not regarded as unemployed.
However, it is said to be important to grasp the real situation of such people. To achieve that, the Labour Force Survey "Detailed Tabulation" is undertaken.
According to the Labour Force Survey "Detailed Tabulation"(2017 Yearly Average), persons not in labour force are 43.76 million, of which, those with "Wishing to work" are 3.69 million. Of which, persons with "No prospect of finding a job " are 1.03 million, of which, those with "Can take up job immediately if a job is available" are 350,000, and of which "Sought a job during the past one year" are 200,000.
According to the ILO international standard, the definition of "the unemployed" is all persons who during the reference period were: (1) "without work", (2) "currently available for work", (3) "seeking work". So, those who are not seeking work are not regarded as unemployed.
However, it is important to know the real situation of persons who do not remain in labour force due to the severe economic situation or other reasons, including those who wished to work but gave up seeking work because of the belief that no suitable work is likely to be available. For this purpose, the Labour Force Survey "Detailed Tabulation" is conducted.
Like other major advanced countries, the definition of the "unemployed" used for Japan's Labour Force Survey conforms to the international standard stipulated by the ILO to grasp the employment and unemployment status objectively. Therefore, Japan's definition of the unemployed is not narrower than that of other nations.
The ILO defines the unemployment as follows:
The "unemployed" comprise all persons above a specified age who during the reference period were
(1) "without work", i.e. were not in paid employment or self-employment,
(2) "currently available for work", i.e. were available for paid employment or self-employment,
(3) "seeking work", i.e. had taken specific steps to seek paid employment or self-employment.
The Labour Force Survey is conducted in accordance with ILO international standards both in Japan and the U.S. Both countries adopted the definition of "the unemployed" for all persons who during the reference period were: (1) "without work", (2) "currently available for work", (3) "seeking work". So, the unemployment rates are comparable between the countries. However, fine points are slightly different because each nation has its own employment situation. For example, as to the criterion of seeking work, Japan's definition includes not only persons who made arrangements to take up paid employment or undertake a self-employment activity within the past one week but also those who were waiting for the results of the past job seeking activities. On the other hand, the U.S. definition includes only those were seeking jobs within the past four weeks. So, it cannot be simply decided which definition can produce a higher or lower unemployment rate.
OECD calculates and presents Harmonised Unemployment Rates for 30 OECD member countries, which are adjusted in a way to bring them close to the ILO standard values as much as possible. However, for Japan, the U.S., Canada and etc., OECD shows the values presented by each government as its Harmonised Unemployment rate.
13. Are those who became unemployed after quitting their job using an early retirement program regarded as involuntarily unemployed?
The involuntarily unemployed are defined as those who were forced to quit jobs for employers' or business reasons, such as a personnel reduction, poor business performance, or retirement age, and began seeking work. On the other hand, the voluntarily unemployed are those who quitted jobs for their own or family reasons and began seeking work.
A company's early retirement program provides more favorable terms and conditions than those of normal retirement to solicit retirees. Those who quitted jobs using the program with their intention are regarded as voluntarily unemployed. However, since the programs and their administration vary from company to company, their classification into the involuntarily or voluntarily unemployed depends on their answers.
14. Are the unemployed restricted to those registered at public employment security offices: "Hello Work"?
The Labour Force Survey distributes questionnaires to about 40,000 households selected at random from the whole country, and derives statistical data from their answers. Therefore, the unemployed include not only those who are seeking work by registering themselves at public employment security offices (Hello Work) but also all other persons who are seeking work regardless of their methods, such as answering job offer advertisements or magazines, or seeking assistance of friends or schools.
The quarterly unemployment rates by prefecture (small area estimation) were released in May 2006 for the first time in order to collect information on employment status by prefecture and be released quarterly after that. However, the Labour Force Survey is a sampling survey designed to reveal the employment and unemployment status for whole Japan and to infer its changes. Precision of prefectural data is not as sufficient as that for the results for whole Japan, because the sampling design is not based on prefectures and the number of samples in each prefecture is relatively small. Therefore, it is necessary to take care when you use it.
Some monthly statistics derived from surveys, such as the Labour Force Survey, show a similar trend every year due to seasonal factors. For example, agriculture workers tend to increase in number from spring to summer and decrease from fall. This is called seasonal fluctuation.
During monthly statistics analysis, if you compare a value of a month with that of the same month of the previous year, you do not have to take seasonal fluctuation into consideration. However, if you try to compare with that of the previous or second previous month, you cannot tell the difference is due to business or seasonal fluctuation. In this case, seasonally adjusted values are used to eliminate seasonal fluctuation.
For statistics data like unemployment rates whose monthly fluctuation is more important, we mainly present seasonally adjusted values with unadjusted ones shown as complementary data.
For statistics data like the number of peoples or scale whose values themselves are more important, we mainly present unadjusted values with seasonally adjusted ones shown as complementary data.
17. What is the relationship between the ratio of active job openings to applicants presented by the Ministry of Health, Labour and Welfare and the unemployment rates?
The ratio of active job openings to applicants is a rate of the number of job offers (sum of the carried forward ones from the previous month and new ones) to the number of job seekers registered at public employment security offices ("Hello Work") all over the country. It indicates the number of job offers per one job seeker.
The unemployment rate and the ratio of active job openings to applicants fluctuate in tandem with the cyclical movements of the overall economy. These rates are both used as Index of Business Conditions. The ratio of active job openings to applicants is regarded as a coincident index that moves in tandem with the cyclical movements of the overall economy. On the other hand, the unemployment rate is regarded as a lagging index that turns down after the beginning of a recession and turns up after the beginning of a recovery. In other words, unemployment rates tend to lag behind the ratio of active job openings to applicants in fluctuation.